Calls for higher affordable housing targets as more people on ‘cusp of poverty’

Bold calls demanding developers make room for affordable housing in Sydney’s apartment buildings fell on deaf ears as the state government rebuffed the suggestion on Thursday, despite mounting pressure to solve the city’s homelessness problem.

A petition calling for a mandatory affordable housing target of at least 15 per cent for new residential developments was discussed in NSW Parliament, after gaining more than 16,000 signatures.

The petition, launched by the St Vincent de Paul Society, also called for a 30 per cent target for redeveloped state government land.

There are calls for 15 per cent of new developments to be set aside for affordable housing. Photo: Peter Rae

But the Minister for Planning and Housing Anthony Roberts argued against the target due to concerns about how it could impact the deliverability of developments.

“There’s no point in having a target that cannot be met. The result will be there is no development and our housing crisis will worsen,” he said.

He said the government would work with the Greater Sydney Commission – which has proposed a 5 to 10 per cent target – to establish a realistic, achievable target.

“A growing number of people are on the cusp of poverty, they’re struggling to pay rent, to pay their electricity, increasing affordable housing could help prevent more people ending up on the streets.”

Clover Moore would like the City of Sydney to be able to extend a levy on developers, which funds affordable housing, like The Platform Apartments at Eveleigh. Photo: City West Housing.

Moore hit back saying it was a result of “gutless inaction” and called for, among other measures, the state government to support City of Sydney’s calls to extend an affordable housing levy – currently imposed on developers in the Green Square and Ultimo/Pyrmont precincts – across the local government area.

Moore later told Domain she would support a 30 per cent affordable housing target for public land, but noted it might be better to take an incremental approach for private land.

“I think [15 per cent] is a great, bold step, but we don’t have a state government that takes bold steps.”

Independent Member for Sydney, Alex Greenwich, said the government needed to start treating housing affordability like the crisis they keep saying it is.

“If it’s a crisis we do need to take definitive action and the first tool in the bank should be inclusionary zoning.”

While Mr Greenwich believes developers’ profit margins could cope with a 15 per cent target, Urban Taskforce chief executive Chris Johnson said developers would have to drive up prices of other properties to recoup the costs.

“People go ‘oh the developer can just get a much lower profit, but the banks won’t lend you the money’,” he said. “It’s counter productive…the most likely scenario is that it would bump the prices of the rest of the housing up by 10-20 per cent.”

He said suggestions developers could pay less for development sites were also flawed, as he believes private land would be held back from the market, and Treasury wouldn’t be happy to discount public land.

He said the state government, which caps the wages of a lot of key workers, needed to increase their incomes to bridge the gap, or take a “major hit” on the sales price of public land.

Mr Johnson said a better alternative to inclusionary zoning would be to offer developers incentives, such as an uplift in floor space and height, with the proviso additional accommodation was used as affordable housing for 10 years.

CBRE’s chairman of residential projects Justin Brown added with more than 30 per cent of an apartment’s value now taken in taxes, the government would need to relax planning restrictions and taxes, so developers could afford to produce affordable housing.

Member for Epping, Damien Tudehope, who presented the petition to parliament, told Domain he was concerned a mandatory target would reduce the supply of properties.

He said while increased affordable housing was needed to combat the growing number of Sydneysiders unable to afford to live remotely close to their work, he felt the shortage would better be addressed by offering developers an uplift in density.

Andrea Galloway, chief executive of community housing provider Evolve Housing, said the targets could work if developers were facing less taxes, and given greater floor space and height allowances.

She said the government would also need to be willing to discount public land, to encourage developers to take on projects with a 30 per cent target. While this would cost the government coffers in the short term, she said it was a cheaper alternative then having to support a growing homeless population.